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Most businesses ready to embrace the "new normal"

By: Rachel Miller

Date: 19 May 2020

The latest Coronavirus Business Impact Tracker from the British Chambers of Commerce has found that UK small firms are ready for a gradual reopening of the economy but they still need government support.

The latest British Chambers of Commerce (BCC) weekly tracker poll was conducted prior to the prime minister's announcement on a roadmap to gradually ease lockdown restrictions and the launch of safe workplace guidance.

Even so, the vast majority of small businesses surveyed said they are ready to restart operations as government restrictions are relaxed, with 89% saying they need just three weeks or less to reopen. Most said they would be able to keep staff safe:

75% said they could implement social distancing measures;

70% said they could make provisions for remote working (although 20% said this was not applicable to their business);

61% said they could stagger arrival times (29% said this was not applicable).

The findings also show that the percentage of respondents that have submitted a claim to the government's Job Retention Scheme and received payment remains high, at 73% this week - up from 59% last week. The results indicate that "very few" businesses have made any redundancies.

Looking ahead, 63% of firms said they could un-furlough staff as restrictions begin to ease, but 36% said they could not.

BCC director general Dr Adam Marshall said: "The government should continue to listen to business and evolve the [furlough] scheme in line with what's happening on the ground. Further, phased support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions."

However, there are serious challenges ahead for a significant number of UK businesses. The latest data from the Office for National Statistics (ONS) reveals that 44% of businesses that had not permanently ceased trading between 20 April and 3 May said that their cash reserves would last less than six months.

And a recent survey from the Federation of Small Businesses (FSB) has found that one in three small firms that have closed during lockdown fear they will never reopen.

The FSB's poll of over 5,000 UK small business owners revealed that 41% have been forced to close since the beginning of the coronavirus outbreak. Of those, 35% are not sure whether they will ever reopen again. More than one in three (37%) small employers are considering, or have already made, redundancies.

FSB national chairman Mike Cherry said: "Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we're into the recovery phase. The crucial support that's on offer needs to be kept under review, and adapted to reflect the new normal as we chart a course back to economic recovery."